Gold Fields Hires CEO Who May Fix Troubled Giant Mine
Gold Fields Hires CEO Who May Fix Troubled Giant Mine
Gold Fields Ltd. named former Anglo American Platinum Ltd. boss Chris Griffith as its new chief executive officer as the company seeks a solution for its last gold mine in South Africa.
The new chief will start on April 1, succeeding Nick Holland, who is retiring after 13 years at the helm. Gold Fields extended gains on the news, rising as much as 6.2% in Johannesburg trading.
Griffith left Anglo American Platinum Ltd. last year at a high point for the company, having recently reported bumper earnings and boosted shareholder returns. During his tenure, the Anglo American Plc unit sold and mothballed less profitable operations to focus on lower-cost mines.
While Gold Fields’ incoming CEO would be open to growing the company through new opportunities, it could also boost value by advancing existing, internal projects, Griffith said.
“I want whatever help I could bring as an operator who has turned many mines around to be able to build on what’s already been done,” Griffith said on a conference call. “There has been a great improvement in safety and productivity and I hope South Deep hasn’t been sold by the time I get there.”
At Gold Fields, he’ll be confronted with advancing the development of a new mine in Chile, while continuing the turnaround at the troublesome South Deep operation in South Africa. Like its larger rival AngloGold Ashanti Ltd., Gold Fields has shifted focus to more profitable mines in Africa, Australia and the Americas as the industry in South Africa dwindles amid geological challenges and soaring costs of mining the world’s deepest deposits.
“It would be interesting to see whether he sells South Deep,” said Mandi Dungwa, an analyst at Kagiso Asset Management Ltd. “At Amplats he sold non-performing assets or closed them.”
Gold Fields, founded by Cecil Rhodes in 1887, has previously been under pressure from investors to end years of losses at South Deep. While the mine sits on the second-biggest known body of gold-bearing ore, it has failed to meet production targets despite a number of operational revamps. Its problems have been compounded by power shortages and regulatory uncertainties in South Africa.
Griffith will bring his underground-mining experience to bear on South Deep, said Bloomberg Intelligence mining analyst Grant Sporre.
“His successful turnaround of Amplats is a good foundation to tackle Gold Fields’ problematic South Deep mine and develop its international portfolio of assets,” Sporre said. “Finding a suitable CEO replacement and proving the economic viability of the problematic South Deep mine would help the company close its valuation gap versus peers.”
Management Changes
Holland, who was instrumental in efforts to turn around South Deep, will retire six months earlier than initially announced.
The appointment of Griffith is one of several recent management changes in the global mining industry. AngloGold is also looking for a new CEO.
Griffith “has deep-rooted operational mining experience and an impressive track record of delivering safe operational performance and leading effective change,” Gold Fields Chairwoman Cheryl Carolus said.
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